Employers should become familiar with health insurance laws in California.
Companies offering health insurance benefits to their employees must follow a number of state laws if they are operating their business in California. California state laws have several key differences from other states on the health care issue. It is important for an employer to understand some of the laws involved.
Small Group Law
The California Small Group Law is a set of rules that affects any business with 2 to 50 employees. The law applies to the insurance companies that these small firms deal with to buy health insurance.
The law requires insurance companies to offer group medical coverage to small businesses, regardless of the health of the employees. There are strict limitations on excluding people with pre-existing conditions, and there is a guaranteed renewal provision that makes it illegal to drop the group policy because someone in the group has developed a condition that generates high costs.
Under this law, the plans also cannot be more expensive for groups with high-risk members and much lower for lower-risk "healthy" groups.
Cal-COBRA
Cal-COBRA, the California Continuation Benefits Replacement Act, is the state version of the federal COBRA program. The federal COBRA program helps those who are terminated from employment (or meet other qualifications) keep their group insurance coverage for up to 36 months after leaving the company.
California law requires employers to notify qualifying employees of this option within 30 days of the employee leaving the job, according to the Cobra Insurance website. The Cal-COBRA law is similar to the federal version of the law, except it applies to companies with two or more employees, whereas the federal version is limited to businesses that employ a minimum of 20 workers who are signed up for a group health plan.
Employers must determine whether the former employee qualifies. Qualifying events under California state law include a termination of employment or reduction of hours, except for firing over gross misconduct. The death of the covered employee makes his or her dependents eligible. A child who reaches an age where he is no longer a covered dependent may qualify. If an employee is eligible for Medicare, the law does not apply.
Mental Health Parity Law
California State Assembly Bill 88, passed in July of 2000, is called the California Mental Health Parity Law. Employers who offer group health insurance to employees should be aware that their employees may not have coverage limited or excluded if they or a dependent on the policy has one of several specific severe mental conditions.
In order to maintain an employee's legal rights, the company should encourage him to seek second opinions and to file a grievance through the company health plan if he feels medically necessary treatment has been limited or denied by the insurance company. Qualifying mental health conditions tied to this law include schizophrenia, bipolar disorder, major depression, obsessive-compulsive disorder, panic disorders, eating disorders, autism and serious emotional disturbance in children, according to the SPD Bay Area Group website.
Tags: health insurance, COBRA program, federal COBRA, federal COBRA program, federal version
